17 experts advise on what’s to come this year. Spoiler: Data factors big.
The Innovate Conference for the Advancement of Business Travel offered business travel executives the opportunity to articulate priorities and recommendations.
JAL chairman Masaru Onishi talks:
Japan Airlines this year finally saw the end of
government-imposed restrictions stemming from its bankruptcy protection and now
can set its sight on growth. Tokyo's Narita International Airport, meanwhile,
is exploring adding a runway and reducing the duration of an overnight curfew
on arrivals and departures, which could increase available slots at the airport
from 300,000 per year to 500,000, a significant expansion for the congested
airport. JAL chairman Masaru Onishi spoke with transportation editor Michael B.
Baker, with the aid of a translator, about the carrier's renewed growth plans,
corporate travel demand in Southeast Asia and the role of JAL's global
partnerships in growing corporate business.
BTN: With the
restrictions lifted, what growth plans have you set for JAL?
Onishi: Up until
the 2020 fiscal year, we are aiming for a 23 percent increase in growth. We
have opened the routes for Melbourne on Sept. 1, and also between Tokyo and
Kona, [Hawaii], on Sept. 15. The 23 percent is international. For domestic
flights, that growth will be [slighter, by 5 percent].
BTN: How is
business travel demand holding up?
Onishi: In the
world average, 23 percent of the customers are business travelers. Our business
travelers take up a little more than 30 percent, so we're higher than the world
average. From the perspective of revenue, business travelers are 70 percent
higher than [leisure] travelers. Many Japanese companies are recovering in a
bullish manner, so business travelers are very high yield and simultaneously
very stable customers. Between Southeast Asia and North America, more and more
travelers are flowing, and we are a big part of the hub.
BTN: What are
you doing with onboard products?
policy is that we are trying to increase what we already have done. For the
international business class, we are trying to [expand] the JAL Sky Suite and
the very special seats for premium economy. Vertically it's 10 centimeters
deeper, and horizontally it's 5 centimeters wider. We're working on improving
our Wi-Fi service so [travelers] can do business and [watch inflight]
entertainment together. For a domestic flight, Wi-Fi service is completely
free, and they can use it unlimited. [For] international, we unfortunately
couldn't make it free.
Many Japanese companies are recovering in a bullish manner, so business travelers are very high yield and simultaneously very stable customers."
BTN: How are
you leveraging your partnerships with other carriers to grow corporate
Onishi: We are
planning something very robust with American Airlines. We are trying to deepen
the business relationship. American Airlines is a very strong North American
carrier, so we are trying to draw the best out of each other. Also, on the
European side, we have the joint business with British Airways and Finnair. It's
been difficult for us to penetrate the local corporate [business], but we can
get an assist from our partners and we can get a very strong weapon to
penetrate the market. On the sales side, if you and I have a codeshare
operation, if we find out there is a vacant seat on my aircraft and also you
have a vacant seat, I will sell the seat over here. From the aspect of a
salesman, we are still competitors. In a joint business, no matter what seat I
sell, it's the same result, the same income in the same world.
competition are you seeing from low-cost carriers in Asia?
Onishi: LCCs take
up 30 percent [of capacity] in North America and 40 percent in European
countries. For the whole of Asia, it's more than 50 percent. However, in Japan,
it's only 15 percent. What we have to know is that in the areas where the LCCs
are functioning, they are getting more customers but are not stealing our
customers. They are expanding in their own areas, finding new customers.
BTN: What are
your long-term demand projections?
Onishi: In the next 10 to 15 years, Asia will grow so
fast. The key issue is the success of the [Association of Southeast Asian
Nations] Economic Community. At the end of 2015, the AEC started, but it's
completely different from the EU. The EU is economically one unit and region.
The AEC is still independent. Each state has its own authority. In the
future—it might take more than 20 years—maybe they have a chance to become the
same economic community. That's a huge economic leader. After that, maybe the
center of all of it will move to Africa.